The last several years have proven a tumultuous ride for the market, reaching new all-time highs by running on tracks positioned by an unparalleled Federal Reserve monetary easing program. And it would appear the market still has some steam— or does it?
Although this question is not easily answered, remembering history as a guide is essential when thinking about your future. It wasn’t long ago that the world’s economy was thrown into crises mode, with many retirees left to bare the burden of a dismal financial future. Many feared for the livelihood of institutions and countries worldwide as hope for an economic comeback remained bleak.
By no means is this a warning to grab your guns and gold in preparation for another financial relapse, but merely a reminder to consumers to revisit the basics of financial planning during this New Year. In forgetting the past, it may be repeated— and your dedicated preparation for the coming year is too valuable to be left to chance.
The following concepts are essential steps in creating an effective retirement plan this Near Year.
Annual Financial Check-up
An annual check-up is the best pre-emptive strike at our disposal. While it is beneficial to regularly meet with a financial advisor throughout the year, be sure to meet with yours at least once a year to prevent any unforeseen problems.
Diversity is Key
Does your broker always sell you mutual funds of stocks and bonds? Does your annuity rep try to allocate your every dime to insurance products? In reality, they are most likely mistaken. Finding an advisor who knows the benefits of these products— but also how they work together— is a must on your check list this New Year. Diversification is key and could include assets and products such as Certificates of Deposit (fixed and structured), Real Estate Investment Trusts, Business Development Companies, precious metals, individual stocks and bonds, and an array of other investments.
Reevaluate, Reevaluate, Reevaluate
Since the lows of March 2009 have caused a great equity run-up, remembering to frequently review our investment portfolios is vital. While equity portfolios have significantly increased since then, other areas may have declined, calling for a need to readjust our risk levels. Capture some of those hard-earned gains; you never know— the next big pullback could be looming around the bend. So tread with precaution, not greed!
Photo by Daniel Nanescu
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